Land Law; Implied Trust PDF

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implied trusts in land...

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Implied trust: Implied trusts of land are not required to be evidenced in writing and do not require the signature of the settlor. Law commission report n.278 (2008) sets out four instances when the question should arise: Relationship breakdown, death by cohabitating partner, default on mortgage repayments, insolvency Trust formalities; Legal formalities that are necessary for the creation of implied trust of land according to section 53(2) Law Property Act 1925 do not exist as they are the formation of the courts. Trust registration; (S3 (2) LRA 2002) The registration position of a beneficiary under implied trust is not formed if no one as expressed the words of creation on the trust, therefore if you wish to create it must be done in writing and ideally protected by the register, but if it is an implied trust its likely to not be registered (if it is not on the register, it is non-binding, only exception to this rule is overriding interests). An example of this is an interest in land, which is the trust, because it’s an interest in someone else’s property (proprietary interest), and con only be protected if it’s in occupation. E.g., if a client is worried about getting kicked out of their home where their name is not on the lease, they should remain in occupation and keep all their belongings there (if it’s safe to do so) so their occupation is discoverable. That way if the partner wants to sell the house it can be proven that you’re a trustee/tustor (this can be applied to section 14 to stop the sale), this can be bound as their position is that of someone with an interest in the land and in discoverable occupation.

Resulting trust: A resulting trust is when two or more people contribute to the purchase of a property but the legal title is only in the name of one of them, the legal owner owns a share of the property on trust for the benefit of the contributor (Dyer v Dyer 1788). what is their share? a mere proportion of the contribution. In the case of dyer v dyer, it does not take into account the

complexity of the domestic relationship. Resulting trust is ‘no more than a consensus of judicial inference of the fact to be drawn in the absence of an evidence to the contrary’ Pettitt v Pettitt [1970] per Lord Upjohn. According to this, the ‘nominal’ purchaser (A) or some land, where they purchase the land using money provided by another (B), is deemed by equity to be holding the land on a trust that ‘results’ back to B, the ‘real’ purchaser. This is an application of the principle as stated by Eyre CB: ‘A trust of a legal estate…results to the man who advances the purchase-money’ (Dyer v Dyer [1788]). this rule serves that given A is the named purchaser of the land, the must also be the beneficial owner of the land. If B advances a large portion of money to A for the purpose of purchasing land, the advance of money is more likely to be part of a bargain, and not a gift, this is known as the ‘solid tug of money’ seen in the case of Hofman v Hofman [1965]. Resulting trusts will recognise that the party that provided that purchase money to the person with the title, has a degree of ownership over the land, which coheres in the degree to the size of the contribution made. If the third party provided all the purchase money, then they are the equitable owner. In this, equity serves to give ‘the force of law to moral obligations’ (Sekhon v Alissa [1989]) A person can establish an interest in land on the basis of a resulting trust by making a contribution to the purchase price (the purchase of the land). A limitation of resulting trust is that when are asked about the protection of your interest, you are also asked about acquisition (acquired and interest, have you put money in the bank account of the seller?) and quantification (how much of that share, how much of that property will you own?). this is good remedy for business partners as the shares can be split accordingly. However, in a domestic relationship resulting trust is not enough because it’s not sufficient. Constructive trust: Constructive trust requires a construction of the courts, it is not resulted my means of contribution. In order to claim beneficial interest under a constructive trust the claimant must show that there was a common intention between the parties to share the beneficial interest (in which the claimant must was a common interest between the parties) in the property and

that the claimant has relied on that intention to their detriment. what is their share? Key case: Jones v Kernott [2011] UKSC 53 Sole and joint ownership:

Proprietary estoppel Means by which a person may acquire proprietary interest another’s land (third party) This is a product of equity; therefore, it operates informally so there is no need for a written contract, or agreement. S116 Land Registration Act 2002 and Law commission Report n.271; can be protected by the entry of a notice in the register, or as an overriding interest if the clamant is in actual occupation of the land in relation to which they are claiming an interest. (it can be protected even if its not in the register) This is an equitable remedy so it springs from the conduct and the conscience of the parties, where one party had made an assurance, promise, representation, which is relied upon by the person claiming the right to her detriment. To establish an interest in propriety estoppel, the must be a two-stage process; 1.

Establishing an equity; the claimant must demonstrate that the requirements for

estoppel have been satisfied and that they are entitled to call for a remedy (prove the assurance that the claimant could rely on the existence of an interest in their land) -

The doctrine develops primarily on the cases of: Ramsden v Dyson [1866] & Willmott

Barber [1880] by introducing strict requirements that need to be met to convince the judge that requirements for the estoppel have been satisfied. -

Taylors Fashions Ltd v Liverpool Victoria Trustees Co. Ltd [1982] sets the modern

requirement for estoppel: broader and more flexible approach enlisting 4 requirements to be considered ‘in the round’ (all the aspects that can make up the grounds of interests in propriety estoppel) Gillett v Holt (2001) and Jennings v Rice (2002). The point of this case is that assurance will influence the reliance and in turn the issue of detriment. The requirements include: assurance (which influences the concept of reliance, how much the

person has relied on the assurance), reliance, detriment (the consequence of the reliance), unconscionability (an evaluation of the first three elements to show that it would make it unconscionable for the legal owner to deny the claimant). -

It is often the case that evidence brought to establish the existence of the feature of

assurance and reliance would be similar and the same for reliance and detriment. (Gillett v Holt) Assurance: the claimant acted in the belief that she was entitled or would become in the future to an interest in the land. The assurance must explain how the claimant came to this belief. What counts as assurance: -

Encouragement; the idea that the land owner could encourage the claimant to act as

if they had an interest in the land. Pascoe v Turner [1979], the land owner reassures the partner that the house they share was also shared in value ad ownership. -

Acquiescence by the land owner conduct; refraining from disturbing the claimant in

treating the land as if they had an interest in the land. Cobden Investment Ltd v RWM Langport Ltd (2008), the land owner did nothing as the claimant carried out building work in the landowner’s land. The assurance needs to be ‘clear enough’ Thorner v Major (2009), -

Hints and indirect remarks will suffice

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Reasonable view

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Highly dependent on context’ Lord Walker

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Concerning and identifiable property (expressly or impliedly if it is obvious from

context) -

Must assurance be irrevocable? Taylor v Dickens (1998)

Reliance: Evidence of reliance will likely be the same evidence that establishes assurance -

Reasonable: the claimant must demonstrate they were induced to act differently

under the assumption that they would at some point in the future gain an intrest in the

property. Presumption of reliance Greasle v Cooke: -

Clear assurance

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Intended to influence the claimant

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Any reasonable person would have been influenced

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If any person would have behaved the same way irrespective of the assurance,

reliance is not demonstrated. It again depends on the context: sufficient links be demonstrated. Detriment: -

Reliance is not sufficient but the claimant must also establish that they would suffer

detriment if the land owner would assert his or her legal rights. -

Test: ‘given the claimant’s reliance on the assurances made by the landowner, the

claimant would suffer detriment if she had not claimed for proprietary estoppel’ -

No need for expenditure of money (Gillett)

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Broad enquiry on contextual facts

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Evidence of benefit does not rebut detriment

Unconscionability: It must be unconscionable for the landlord to act in such way to defeat the expectations of the claimant. Precisely because the claimant has been induced by the owner to think that they could rely on the assurance. Unconscioability is an objective standard (so the owner cannot defend themselves by saying that they do not find it unconscionable) The court will make a road inquiry in each case (Gillet): -

The relative positions of the parties and importance of the interest

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Nature of assurance

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Timeframe

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Nature of detriment

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Balancing the benefits

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The conduct of the claimant ‘who comes to equity must do so with clean hands’

2.

Satisfying the equity: once equity has been established ‘the court will consider the

extent of the equity and decide how best to satisfy it’ Crabb v Arun DC (1976) Determining the appropriate satisfaction of the equity: -

What was promised is the maximum extent of the remedy

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Mixed approach: expectation-based vs reliance-based

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Must address the unconscionability of the case

Remedies available to the court: -

Transfer of the legal estate (Pascoe v Turner)

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Grant of a lease (Yaxley v Gotts)

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Grant of license (Matharu v Matharu)

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No remedy (Sledmore v Delby)

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Monetary compensation (Wayling v Jone)

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Grant of an easement (Crabb v Arun)

Proprietary estoppel and constructive trust: If the condition for a constructive trust are present, there would likey be no doubts that estoppel could be argued for : estoppel and constructive trust arguments can be ‘overlap’ -

They both create an intrest informally, and are creations of equity...